Good News: Decline in Global Oil Prices Expected to Bring Economic Relief to Pakistan
A recent report by investment advisory outlet Alpha Beta Core has revealed that Pakistan is set to benefit from a significant decline in global oil prices, with annual energy import savings estimated to be between $3.0 to $3.5 billion. The report, titled ‘A Path to Growth amidst Challenges’, highlights how the recent drop in crude oil prices to below $70 per barrel, with further decreases predicted to reach around $60 per barrel by 2025, will have a positive impact on Pakistan’s economy.
The reduction in energy import costs is expected to alleviate inflationary pressures, improve the trade deficit, and enhance the competitiveness of Pakistani exports by lowering production costs. The report also suggests that the decrease in oil prices will lead to a drop in borrowing costs, stimulating business investments, economic activity, and potentially surpassing the forecasted GDP growth of 3.5% for FY25.
This positive economic outlook has prompted credit rating agencies like Fitch and Moody’s to upgrade Pakistan’s economic standing, boosting investor confidence. The report emphasizes the need for policymakers to implement structural reforms to sustain economic gains and utilize the newfound fiscal space to focus on critical reforms and development projects.